Tax Strategies

Diane Kennedy’s Tax Loopholes

Hi Friend:

The way we do anything is the way we do everything.

I heard that this past Sunday and it really struck me.   In fact, I realized that it is really the basic truth of predicting your (or anybody’s) financial future.  The way you do anything is the way you’ll do everything.  When it comes to the ability to make, and keep, money, I see three things that make all the difference.

WEALTH-ACCUMULATING TIP #1 – Watch what questions you ask.

At TaxLoopholes, we get a lot of emails and letters every week.  The letters tell a lot about the person asking them. Most of them are from people who have had great success since they took the plunge to invest in real estate or begin their business.  Tax savings will be the first, immediate reward.  In fact, did you know that if you start a business today, you could reduce the amount of taxes you have withheld from your paycheck with the very next paycheck you receive?  It really is that simple. 

Some of the questions have a great deal of detail and are looking for very specific answers.  Those are the types of questions that CPAs are trained to answer.  I generally ask the writer to post their question over at the First Class Lounge Forum.  We get some lively conversations going over there! If you haven’t checked it out yet, take a look.  The first 30 days are free.

Some questions, though, are a little harder to answer.  Sometimes the question asked isn’t even the question that the person should be asking.  It’s like the guy whose car is stalled on the train tracks and the train is bearing down on him.  He stops to ask a passerby what color she thinks he should paint his car.  A better question might be, “How do I move this car?”

Of course, you wouldn’t do that if your car was stuck on the railroad track.  Yet, many people do exactly the same thing with their financial plan.  They might ask, “IF I start investing in real estate and IF I start a company and IF it makes money, what state do I incorporate in?”  A better question might be, How do I get started with real estate investing?  Or, what is the best business structure for my new business?    Get that car started first before you worry about what color you’re going to paint it.

A powerful question is one that allows your advisor to expand.  Some examples, “How can I discover my hidden business deductions?”  “What is the best business structure to protect my assets as I grow my wealth?”  “How can I work with my tax advisors in the most time-efficient and productive way to product real, tangible results?”

WEALTH-ACCUMULATING TIP #2 – Be careful of whom you ask advice. 

Or, another way to say this is simply, “Free advice is the most expensive advice you’ll ever get.”

The most important questions you’ll ever ask could very well be the questions you ask your advisor ABOUT your advisor.

You will want to know their experience with business and investors like you, what their clients are like and the process they use to work with their clients.  And, the one question I always ask, has to do with their personal viewpoint.

I had a client who once told me a story about their former CPA.  My new client desperately wanted to be a real estate investor, but was nervous about making that first investment.  So, he asked his CPA to review each deal before he moved forward with it.  In each case, the CPA advised against the investment.  Finally, in frustration, my new client asked him, “What do you think would be a good investment?”

The CPA looked shocked and exclaimed, “Why none of them, of course!  Real estate is a bad investment.  I don’t even own the house I live in.”

How many deals had my client lost out on by taking that advise?  How much money had that CPA’s viewpoint cost him?

Now contrast that with something we just heard from one of our clients:

Y’all are awesome! I should have called you two years ago. I ask, you answer…and everything makes sense because you have good reasons to back up your answers. Lisa V., Texas

Or how about what Janis in Florida told us:

In addition to the tax savings and protection your team has and will provide, each member’s confidence and excitement in your services, knowledge of all things taxes, and encouragement fill me with optimism about my family’s financial future, which is priceless.

I know you and your team must hear this often enough, but here it is again, a heartfelt thank you.

Janis M., FL

Thank you Lisa and Janis!  And, thanks for taking the time to say “thank you.”   You can tell that both will prosper because they know how to find good people and then build them into a team that supports their goals.

If you’d like a complete list of the questions you should ask EVERY SINGLE PERSON you add to your team as an advisor, please go to the First Class Lounge Forum for the DKA Advisor Checklist.

That’s a good start.  Now, how would you like to find out if you’re paying too much in taxes FOR NO COST!   In fact, it’s never been easier for you to get a review of your current tax situation personally by me.  Find out how by giving Richard a call at 888-592-4769 or dropping him an email at CPA@TaxLoopholes.com.

Once I’ve reviewed your past year’s business and personal tax returns to determine the estimated tax savings that you would get with a tax strategy, Richard will call you back to outline the program and ask if you want to move forward. You haven’t paid a dime yet.  You can just say “No thanks” to a tax savings for $20,000, $30,000 even $90,000 at this point.  It won’t cost you a dime and there will be no hard feelings.  I promise you that if you say “no”, we’re not

going to continue to call you and try to convince you to save money on your taxes. 

If you do decide that investing $5,000 for a return of $20,000 or more is a good deal, then Richard will go through the additional information that I might need and we’ll schedule your tax strategy phone call.  I’ll go through the strategy step by step during the phone call and, if you wish, we will tape the call so that you get a copy of everything we discussed.  We’ll also follow up in writing with your customized strategy complete with action steps and educational materials to help you understand the changes that we are recommending.  In some cases, you may need to change your business structures.  We’ll help you with that and give you an affordable quote from one of our referral companies.  If you’d prefer to work with your own lawyer, that’s fine too.

The part that I’m proudest of, and to be honest, the part I think that you should be most concerned with is that we stand by our tax strategies by also offering full service such as tax preparation and IRS audit defense, if needed.  I’ve seen a surge in people claiming to be tax strategists, but when you examine what they really do, they merely sell you an entity.  They don’t even provide tax preparation services and worst yet, if you try to follow their “advice” and the IRS challenges it they can’t help you.  Yikes!  That’s a scary proposition.

With my CPA firm and DKAffiliated CPAs, that’s not going to happen to you.  We will be here when you need us.  Remember to give Richard a call at 888-592-4769 or drop him an email at CPA@TaxLoopholes.com to get the process started.

WEALTH-ACCUMULATING TIP #3 – Take action!

If you find a good deal, sign it up!  If you don’t know if it’s a good deal, chances are the problem is not the deal – the problem is your ability to tell the difference between a good deal and a bad deal.

Some people want all the answers before they even get started.  That leads to the “Knowledge Paradox.”  The more you know, the more you know what you don’t know.  In other words, you can never know enough to satisfy every naggy question. Just know what you need to know and then take action.  Don’t expect to know everything because you can never know everything.  

Now what?

Is your current plan working?  The best evidence you have will be in your own life.  Do you have friends and advisors who can push you to the next level?  Are you financially better off than you were last year?  Perhaps more importantly, are you doing what you really want to do and living your life with passion as you make a significant contribution to your family and your community?

It’s amazing to think of the changes that just one person can make, if that person is dedicated to creating something fantastic.  But, that only works if you are willing to take the necessary steps to move forward. 

Here’s my challenge to you.  Make a commitment TODAY to write down the one action you can take right now that will move you forward to creating the life you want.   Now, before the day is done, take a step toward that action.

It might mean that you need to hire a bookkeeper.  Or you might need to read a book or attend a seminar.  Or, maybe it’s simply time to change the advisors in your life.  Whatever that action is, take one step, no matter how small, today.  You deserve to live the life you want.

Will it be easy?  No.  A favorite saying at our office is “If it was easy, everybody would be doing it.”   The average 50 year old in America today has a negative net worth.  If you want to follow the “average” advice that you will get from mainstream press and advisors, that’s what you have to look forward to.  Average.  If you want more than that, then you’ll have to do something different than what’s average.  And, that will be scary.

Live and act with certainty.

Warmly,

Diane Kennedy

P.S.  If you’re ready to step up the quality of the advice you get, we want to talk to you!  Please call Richard today at 888-592-4769 or drop him an email at CPA@TaxLoopholes.com..

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